Nokia has introduced a new smartphone, the Lumia 1020, with a powerful 41-megapixel camera that boasts "more detail than the eye can see" in its latest bid to catch up with rivals Samsung and Apple.

The Finnish company said the smartphone "is able to produce some of the sharpest images possible by any digital camera".

41-megapixel camera: Nokia's Lumia 1020.

Using a feature called dual capture, the 1020 simultaneously takes a high-resolution 38-megapixel image for editing opportunities, and a five-megapixel picture that is easy to share on social networks, Nokia said.

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Tech bloggers responded enthusiastically, saying the camera quality was the highest in the market. But analysts questioned whether it was enough to help Nokia, suffering a fall in cash reserves after years of poor sales, survive.

"The hardware's a beauty on this thing," said tech website Engadget after Nokia chief executive Stephen Elop demonstrated features including "floating lens" technology that adjusts for camera shake and six lenses that help produce sharper images.

The mobile phone maker is pinning its hopes for a comeback in smartphones on Microsoft's Windows Phone – an operating system that is struggling to compete with Google's popular Android system and Apple's iPhone.

While regular feature phones still account for the bulk of its shipments, smartphones are viewed as crucial for its long-term survival because of their higher margins and increasing demand for web access from mobile phones.

Jo Harlow, Nokia's executive vice president in charge of smart devices, said the growing popularity of photo and video sharing meant more consumers will want better cameras.

Nokia Lumia 1020.

"Taking pictures is in the top three things people do with a smartphone. It's a relevant feature to be focused on," she said. "To stand out you have to differentiate."

The new Lumia's 41-megapixel count far exceeds those of the iPhone 5 and Samsung Galaxy S4 Zoom, at 8 and 16 megapixels respectively. It is also higher than some compact digital cameras, although higher megapixels do not necessarily mean better photos as factors such as lens quality also affect the end result.

"The imaging capabilities here are extraordinary," said Current Analysis analyst Avi Greengart.

41-megapixel camera: Nokia's new smartphone, the Lumia 1020.

But he added: "It's still a Windows Phone ... if somebody is looking for applications they're still going to look at iPhone."

Tony Cripps, analyst at research firm Ovum, said Nokia's new device "sets a new benchmark for high-end smartphone engineering" and highlights Nokia's technical strengths.

"But the company must still overcome incumbent rivals, slow adoption of Windows Phone and a modest marketing budget if it is to finally help the company turn a financial corner after its recent time in the doldrums," Cripps added.

Daniel Gleeson at IHS had a similar view.

"The Lumia 1020 will act as a halo product to boost Nokia's brand appeal," he said, but "will not ship sufficient volumes to turn around the company's fortunes on its own."

Marketing push

The new Lumia, which use Windows software, will be sold in the US from July 26 on mobile telco AT&T for $US299.99 with a two-year contract, and will be available later in other markets including China, Nokia said.

Telefonica SA, a carrier partner in European and Latin American markets, will get a version of the device, Nokia said. No details about Australian pricing and release date has been made available.

Earlier Lumia models also won positive reviews from critics and technology blogs but have failed to halt a shift to Android phones. Android and Apple's iOS together account for more than 90 per cent of smartphone sales, according to research firm IDC.

One major handicap has been a lack of apps. Windows Phone has only 160,000 apps, while rivals offer about five times as many because developers prefer to make them for the higher-volume operating systems.

"Despite the quality of the device, I have some serious doubts about whether it will change Nokia's fortunes, and it risks becoming a niche product," said IDC analyst Francisco Jeronimo.

He and other analysts have also said Nokia needs to step up advertising and promotion of its phones. Many have said telecom carrier partners, particularly in the US, have failed to promote Nokia to their customers.

Elop said Nokia was pooling resources with US carrier AT&T and Microsoft to market the Lumia 1020, positive news for investors who have been worried about the company's lack of funds.

Nokia said last week that its net cash position at the end of the second quarter was between €3.7 billion and €4.2 billion ($5.3 billion and $6 billion), meaning it burned through as much as €800 million ($1.1 billion) in the quarter.

"This is the first real glimmer of hope for Nokia's resurgence and the viability of the Windows ecosystem in smartphones – provided Nokia, Microsoft, and their operator partners can convince consumers that this experience is indeed a leap forward," said Forrester Research analyst Charles Golvin. "That will be the real hard work."

Reuters

125 comments

Yes. Simply amazing. "MUST HAVE" device.

Commenter

Sheeds

Location

Melbourne

Date and time

July 12, 2013, 10:09AM

only if xda has an android port

Commenter

paul

Location

sydney

Date and time

July 12, 2013, 11:22AM

The Nokia line of products - past and present - are really of appeal to an older generation of buyers: 60's and up. Those who fondly remember mainframe computers, DOS/Windows and are now making their way to retirement. Adding a high megapixel camera is not that useful. Maybe a better thing would be larger fonts for older buyers and a phone that has a walking cane app. The larger phone market - iOS & Android - is where the sales are and they appeal to the largest group. People under 50.

Commenter

ejr1959

Location

Double Bay

Date and time

July 12, 2013, 12:31PM

Take note: "factors such as lens quality also affect the end result" - a statement of the bleeding obvious. And "also"? What does light pass through to be focused on the sensor????

Maybe this should have been "factors such as sensor pixel count, size and pitch also affect the end result".

@ejr1959 "The Nokia line of products - past and present - are really of appeal to an older generation of buyers: 60's and up"

Yeah, right. Tell that to my teenage kids--two of them choosing Nokia Lumia's over iOS or Android.

Commenter

paulc

Location

Brisbane

Date and time

July 12, 2013, 1:41PM

Nokia makes great products, no doubt about that, I own a Lumia 920 which is a nice mobile phone on its own but its OS ( Windows 8) is a piece of crap like a typical Microsoft product with so many design flaws.

That is the problem with Nokia a great company married to a lemon maker like Microsoft, which does enhance Nokia's reputation.

Commenter

Regh

Date and time

July 12, 2013, 1:49PM

Nokia makes great products, no doubt about that, I own a Lumia 920 which is a nice mobile phone on its own but its OS ( Windows 8) is a piece of crap like a typical Microsoft product with so many design flaws.

That is the problem with Nokia a great company married to a lemon maker like Microsoft, which does enhance Nokia's reputation.

Commenter

Regh

Date and time

July 12, 2013, 1:49PM

High resolution does not meen high quality. You'll get high resolution pictures of poor quality images. More megapixels are good, but lens quality is everything.

Commenter

Bushranger

Location

Sydney

Date and time

July 12, 2013, 2:13PM

After switching to WP8 early in the year with the Lumia 920, I'd find it hard to go back to Android. I'd definitely get the 1020 - if I didn't have 18 months or so to go on my current contract.